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Home Source documents Committee Statement — Senate Commerce Committee, Senate No. 891 (New Jersey, February 10, 2022)

Committee Statement — Senate Commerce Committee, Senate No. 891 (New Jersey, February 10, 2022)

Summary

Senate Commerce Committee Statement to Senate, No. 891, with committee amendments, State of New Jersey, dated February 10, 2022, reporting Senate Bill No. 891 favorably and with committee amendments. The statement says the bill, as amended, prohibits tax preparers from requiring clients to enter into a refund anticipation check agreement to complete a tax return, and from advertising refund anticipation loans or checks as "free" or "no cost" in certain circumstances. Tax preparers would have to provide an itemized statement of service charges and fees, and violators would be subject to the Consumer Fraud Act. The bill applies to tax filings prepared in 2023 for calendar year 2022.

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“Committee Statement — Senate Commerce Committee, Senate No. 891 (New Jersey, February 10, 2022).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2022-02-10-scm-s891-s1-bd78926964/, SHA-256 c6fff8216b2385b9bf5117cbd317b827e5392129aa0f78388970f6f3fed47af8.

Full text

     SENATE COMMERCE COMMITTEE

                   STATEMENT TO

                  SENATE, No. 891
                  with committee amendments



 STATE OF NEW JERSEY
                  DATED: FEBRUARY 10, 2022

    The Senate Commerce Committee reports favorably and with
committee amendments Senate Bill No. 891.
   As amended, this bill prohibits tax preparers from engaging in
certain practices involving refund anticipation checks and loans.
   An income tax refund is the largest lump-sum payment that
many residents in the State receive in a given year, and many tax
preparers take advantage of this fact by offering residents—
particularly low-income residents—refund anticipation loans and
checks at exorbitant interest rates or with other exploitative
practices. Under this bill, tax preparers will be prohibited from
requiring clients to enter into a refund anticipation check agreement
in order to complete a tax return. Tax preparers will also be
prohibited from providing, offering, or advertising refund
anticipation loan or check services using terms such as “free,” “no
cost,” “no fee,” or other language that would lead a client to
reasonably believe that the refund anticipation loan or check is
provided at no cost to the client if the issuance of a refund
anticipation loan or check results in, or is predicated upon, the
assessment of higher or additional fees for other tax preparation or
other services than are charged to clients who do not receive refund
anticipation loan or check services.
   Additionally, tax preparers will be required to provide an
itemized statement of all service charges and fees for tax return
preparation, electronic filing of a tax return, providing or
facilitating a refund anticipation loan or refund anticipation check
and any interest charged, including the estimated amount of interest
in the event a refund is delayed, under the terms and conditions of a
refund anticipation loan; and any amounts to be paid to the tax
preparer in the event a refund is delayed, under the terms and
conditions of a refund anticipation check. Tax preparers who violate
any of the provisions of this bill will be subject to the Consumer
Fraud Act. As used in this bill, “refund anticipation check” means a
check, stored value card, or other payment mechanism representing
the actual or anticipated proceeds of the client’s federal or State
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income tax refund which was issued by a depository institution, tax
preparer, or other person that received or anticipates receipt of a
direct deposit of the client’s federal or State income tax refund and
for which the client has paid a fee or other consideration for such
payment mechanism.
   Lastly, the effective date of the bill is immediate and its
application to begin with tax filings prepared in 2023 for calendar
year 2022.

COMMITTEE AMENDMENTS:
    The committee amended the bill to:
    (1) add a subsequent reference to “fees” in the provision on what
itemized statements are to include;
    (2) stipulate that an itemized statement is to include any amounts
paid to the tax preparer in the event a refund is delayed, under the
terms and conditions of a refund anticipation check; and
    (3) clarify that the application of the bill is to begin with tax filings
prepared in 2023 for calendar year 2022.

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